Foreign Direct Investment in Transitional Economies: A Case Study of China and Poland PDF
Preview Foreign Direct Investment in Transitional Economies: A Case Study of China and Poland
Foreign Direct Investment in Transitional Economies A Case Study of China and Poland Michael Du Pont FOREIGN DIRECT INVESTMENT IN TRANSITIONAL ECONOMIES Also by Michael Du Pont NEW INVESTMENT OPPORTUNITIES IN CHINA FOR DAIRY AND AGRICULTURAL PRODUCTS (published by the Australian Dairy Research and Development Corporation) COMPARISON BETWEEN CHINA AND POLAND: A CASE STUDY OF APPLE AND ORANGE (published in China, in Chinese) NEW WAVES OF FOREIGN DIRECT INVESTMENT IN EMERGING MARKETS: PATTERNS AND CHANGES (published in China, in Chinese) Foreign Direct Investment in Transitional Economies A Case Study of China and Poland Michael Du Pont First published in Great Britain 2000 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 978-1-349-42335-4 ISBN 978-0-333-97752-1 (eBook) DOI 10.1057/9780333977521 First published in the United States of America 2000 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 Library of Congress Cataloging-in-Publication Data Du Pont, Michael, 1995 Foreign direct investment in transitionaleconomies : a case study of China and Poland / Michael Du Pont. p. cm. Includes bibliographical references and index. 1. Investments, Foreign±China±Case studies. 2. Investments, Foreign±Poland±Case studies. HG5782.D8 2000 332.670300951±DC21 # MichaelDu Pont 2000 Softcover reprint of the hardcover 1st edition 2000 978-0-333-91790-9 All rights reserved. No reproduction, copy or transmission of this publication may be made without permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 0LP Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10 9 8 7 6 5 4 3 2 1 09 08 07 06 05 04 03 02 01 00 To my parents Sophie and Steven, my niece Elizabeth, and in memory of dear aunt Aniela This page intentionally left blank Contents List of Tables and Figures xi Preface xv Abbreviations and Acronyms xvii 1 Introduction 1 Purpose and Scope 1 Methodology 5 Structure 5 2 Trends and Patterns of FDI: Theory and Evidence 7 Introduction 7 The Traditional View 8 Theory 9 Other Theoretical Contributions 15 Limitations of Existing Theories 16 Empirical Evidence 20 Analytical Framework 27 Conclusions 32 3 China and Poland: An Overview 34 China: An Introduction 34 Economic Structure 37 The Communist Legacy 42 Fiscal Management 43 Foreign Trade 46 Poland: An Introduction 52 Economic Structure 58 The Communist Legacy 62 Fiscal Management 63 Foreign Trade 65 Conclusions 69 4 Investment and Trade Policies 71 China: An Introduction 71 Foreign Investment Policy 72 Trade Policy 79 Foreign Exchange Control System 83 vii viii Contents Foreign Exchange Policy 85 Labour Market Policy 87 Privatisation Policy 89 Poland: An Introduction 91 Foreign Investment Policy 92 Trade Policy 98 Foreign Exchange Control System 101 Foreign Exchange Policy 102 Labour Market Policy 105 Privatisation Policy 107 Conclusions 111 5 Trends and Patterns of FDI: An Overview 113 Global Trends and Patterns of FDI 113 China: Trends in FDI Inflow 115 Ownership Structure 118 Sectoral Composition 122 Source-Country Composition 125 Regional Distribution 129 FDI and Trade Orientation 132 Poland: Trends in FDI Inflow 135 Ownership Structure 138 Sectoral Composition 141 Source-Country Composition 143 FDI and Trade Orientation 145 China and Poland: Comparative Analysis 147 Conclusion 149 6 A Survey of FDI Firms of China and Poland: Methodology and Characteristics of the Sample 150 Methodology 150 The Survey Description 151 Characteristics of the Survey Respondents 153 China: The Survey 153 Poland: The Survey 155 7 Determinants of FDI: Survey Findings 158 An Overview of the Industries 158 China 158 Poland 170 Comparison between China and Poland 182 Contents ix Determinants of FDI 185 China: Domestic Market Size 186 Cost of Labour 188 Supply of Raw Materials 190 The Business Environment 192 China as an Alternative Investment Location 200 Poland: Determinants of FDI 202 Domestic market size 202 Labour supply 205 Cost of labour 207 Business Environment 208 Poland as Alternative Investment Location 214 Comparison between China and Poland 216 Conclusion 218 8 Performance of FDI Projects 221 China: Profitability 221 Production and Investment Plans 223 Technology Transfer 225 FDI and Export Activities 227 FDI and Employment 228 Poland: Profitability 230 Production and Investment Plans 232 Technology Transfer 233 FDI and Export Activities 234 FDI and Employment 238 Comparison between China and Poland 239 Conclusion 242 9 Conclusions 243 Findings 243 Limitation of the Study 247 Policy Implications 250 Scope for Further Research 254 Appendices 255 A3.1 Poland: output of major products 255 A3.2 Poland: state budget 257 A4.1 Specific policies towards FDI in China, 1979±95 258 A4.2 Taxation in China 266 A4.3 Difference between legal firms in Poland 270
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